A crypto exchange is a special online platform through which users are able to make financial transactions with different types of cryptocurrency (Ethereum, bitcoin, etc.).

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A cryptocurrency exchange provides interaction between sellers and buyers, acting as an intermediary between them. Exchange participation simplifies and streamlines the exchange of digital assets, allows customers to use special tools to store crypto, trade it and make financial investments.

Cryptocurrency exchanges come in the following types:

  1. Centralized (CEX). Provide a convenient and simple interface, high liquidity, access to different types of tokens, the ability to use fiat. However, such exchanges ask clients to verify their accounts.
  2. Decentralized (DEX). Do not require proof of identity through account verification and allow customers to have full control over their assets. Minuses: do not provide support for fiat currencies, difficult to use for beginners.

What nuances should be paid attention to when choosing a cryptocurrency exchange?

In order not to lose your money, it is important to choose the right cryptocurrency exchange. If you want to minimize risks, ensure the convenience of financial transactions, pay attention to the following nuances:

  • Transparency of work, reporting on reserves. Reliable crypto exchanges adhere to transparency regarding the storage of financial assets. Some of them provide reports that contain evidence of reserves. With their help, users are able to make sure that the crypto exchange has enough financial resources to cover the deposits of its clients;
  • account verification. Verification of client accounts and KYC procedures are considered inconvenient by some, but they enhance the platforms’ ability to protect users from fraudulent activities;
  • registration, licensing. The presence of a license at a crypto exchange, its registration in one of the developed jurisdictions – evidence of its legitimacy. This indicates the legitimate work of the crypto exchange, minimizes the risks of its use for clients;
  • reputation of the crypto exchange, its history. Before you register on a cryptocurrency exchange, be sure to ask about its reputation, familiarize yourself with its history. Find out how it resists hacker attacks, whether it has been involved in litigation, whether it has been involved in high-profile scandals. Be sure to study reviews of the exchange by other users.